Leasing Activity Remains Steady, Positive Net Absorption Recorded As Vacancy Rate Begins To Recede
The Tri-Cities office market shows signs of a recovery as vacancy rates have started to decline from last quarter’s high of 11.5% to 10.8% this quarter. Part of this reason for this vacancy rate decrease was a lowering of average asking lease rates on the part of landlords. The average asking lease rate for the Tri-Cities office market dropped slightly from $3.05 last quarter to $3.01 this quarter, the first rental decrease in over two years for this market.
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In the second quarter, there was some hope of a rebound for the Tri-Cities office market, which had a rather disappointing first quarter.
In the Second Quarter:
Kaiser Permanente leased 194,200 SF in Burbank.
Arden is selling off quite a bit of their portfolio: 303 N. Glenoaks in Burbank (179,500 SF @ $291 PSF) and 70 S. Lake (104,400 SF @ $349 PSF).
Arden is owned by GE and GE has been hammered lately, mostly in their real estate and finance divisions.
Looking Forward:
IndyMac is going to be a big concern in the third quarter. In the last month they halved their workforce and are in the process of selling at least 60 of their 150 retail outlets.
Pasadena is IndyMac headquarters: 352,000 SF of space at 888 Walnut in Pasadena, 412,146 SF of space at 3465 E. Foothill in Pasadena. With only 1/2 their workforce remaining, it is very likely that a good chunk of this space will be available next quarter, putting further pressure on the Pasadena submarket.
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